Abstract
AbstractAlthough technological complexity seems to be a crucial determinant of economic development, it remains insufficiently explored. Relying on microinformation stored in individual patent applications and by applying the network view of countries linked to the technologies they develop, we create a global technology space and derive complexity measures that position countries in this space. We use then the measures of technological diversification and the ubiquity of technologies present in a country’s technology portfolio as an input to explain the role of technological complexity in countries’ income and economic development. We show that a country’s position in the global technology space affects its level of income and growth. The main channel through which it happens is the exclusiveness and uniqueness of the technological portfolio a country has, as compared to the remaining countries.
Highlights
Technological complexity is a crucial factor and a determinant of development
Expecting that the same is true for technological capabilities, which are a missing link in the analysis of economic complexity framework by Hausmann and Hidalgo (2010), we extend this framework by creating a global technology space and, after ranking countries based on the level of their technological complexity, the main questions we aim to answer in this analysis include: What is the relationship between the level of a country's technological diversification and the ubiquity of technologies present in its technology space? How economic development is affected by the complexity of a country’s technology space? What is the link between the technological complexity and the level of growth?
We find confirmation of the negative impact of the potential number of countries competing in the same technological fields, measured by the average ubiquity of technologies developed by a country, and the level of economic development (column (2))
Summary
Technological complexity is a crucial factor and a determinant of development It still remains only implicitly present in the attempts to explain economic growth and technological progress. Our measures of technological diversification and the ubiquity of technologies present in a country’s technology portfolio are further used as an input to explain the role of technological complexity in countries’ income and economic development. Our results show that a country's technological diversification and the ubiquity of technologies present in its technology space have positive and negative impact on income and growth respectively. We rely on technological fields to which an invention corresponds This information is coded through the International Patent Classification (IPC) classes.
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